PRIME TIME Planning needed for multigenerational families
By Su Bacon
Knight Ridder Newspapers
Successful multigenerational households require planning.
"The parents' entire estate plan should be reviewed" when they move in with one of their children, said Karen Weber, who practices elder law in Overland Park, Kan.
Weber said parents might need to "update the beneficiaries on their will and insurance policies."
Here are other areas Weber recommends children and their parents discuss with lawyers:
Transfer on death certificates: Also known as a beneficiary deed. Transfers ownership of assets, such as a house or a car, from the parent to the child upon the death of the parent. The parent retains the title while living.
Durable power of attorney: A legal document allowing a child or other trusted loved one to take financial or medical responsibility on behalf of the parent.
"This can avoid time-consuming and expensive court-ordered guardianship and conservatorship," Weber said.
With power of attorney, a child can hire caretakers, write checks for the parents, obtain medical records and assume other responsibilities in the interest of the parents.
A contract: A written agreement clarifying the handling of household expenses, rent, transportation and other obligations. A contingency plan should be included in case the living arrangements don't work out.
"A written contract offers elderly parents reassurance about the significant changes that are about to take place," Weber said.
Financial assistance: Money, such as the stipend Jeanette Forrester receives, may be available for the adult children.
Under some circumstances, if a family member is a certified nursing assistant or a nurse, Medicare may provide some coverage. Medicaid is another possibility to explore, Weber said.
Helpers: Weber advises children to consult geriatric care managers from home care service companies for assessments of the houses and the physical and emotional needs of the elderly.
"We can give the children some dos and don'ts to help make their homes safer, and advise them about resources they can tap into in the community," said Marilyn Maize, owner of Elder Care Home Health in Kansas City.
Maize's company offers such services as short-term sitting, meal preparation, bathing, medical care, patient advocacy in hospitals or nursing homes, transportation and long-term in-home care.
Since she founded her business in 1987, Maize has seen an increasing number of adult children and elderly relatives sharing households.
"It's an economical arrangement because you don't have two households to maintain -- especially for Mom and Dad, who may have a limited income or who may have outlived their nest egg," Maize said.
Elder Care Home Health fees range from $16.50 to $22 an hour, depending on the level of care required.
Other organizations can be found in the yellow pages under "Senior Citizens Services" or "Home Health Services."
The good news is that many such companies exist. The bad news is that Medicare and health insurance don't cover many of the services.
Neither health insurance nor Medicare is designed to pay for care involving assistance with the activities of daily living, called custodial care, said Jody Carroll, insurance agent with FC2, an executive and employee benefits firm. Medicare pays some on skilled nursing care, but most long-term care is custodial rather than skilled.
Likewise, health insurance does not pay benefits for custodial care. Long-term care insurance, however, pays for both custodial and skilled care, Carroll said.
"A long-term care policy will absorb many expenses associated with care in the home," Carroll said.
Taxes: Children looking to the tax code for some relief with expenses associated with caring for elderly parents may be disappointed. Little is provided.
To claim elderly parents as dependents on income tax forms, they must meet five tests, said Eva Holmes, a certified public accountant in Parkville, Mo.
The taxpayers must show that they are providing more than 50 percent of the financial support for their parents. Dependents filing joint tax returns cannot be claimed.
The dependents must be U.S. citizens, residents or nationals, or residents of Canada or Mexico; have less than $2,900 in gross income; live in the taxpayer's home for the entire year; and be related to the taxpayers.
If the dependents meet the criteria, the exemption is about $2,900 a year.